Resource title

The effective average tax burden in the European Union and the USA: a computer-based calculation and comparison with the model of the European tax analyzer

Resource image

image for OpenScout resource :: The effective average tax burden in the European Union and the USA: a computer-based calculation and comparison with the model of the European tax analyzer

Resource description

In this paper we present a computer-based model (so-called European Tax Analyzer) for the international computation and comparison of company tax burdens. The methodology follows the forward-looking concepts for the measurement of effective average tax rates (EATR) on the basis of a model-firm. The EATR is computed for investments generating economic rents (i.e. pure profits above the market interest rate). In contrast to the prevailing approaches for calculating EATR based on separate and isolate investment projects the model-firm approach allows to calculate EATR for more complex and realistic conditions that are relevant for the decision making. Due to its flexibility another important advantage of the model-firm approach is the possibility to include the most relevant and complex provisions of the tax codes (i.e. tax systems, taxes, tax rates, and tax bases). A concrete computation and comparison of the EATR of corporations and their shareholders in five different countries reveals the wide spread between the national EATR. Moreover, for the time series 1995-2000 it could be shown that the differences between the EATR have declined a little. In spite of this convergence, however, tax distortions of competition did not become significantly less.

Resource author

Otto H. Jacobs, Christoph Spengel

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24336

Resource license

Adapt according to the presented license agreement and reference the original author.